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____IntroductiontoStrategicSupplyChainManagement.pdf
Introduction to Strategic Supply Chain Management
BY
Updated December 12, 2019
SUPPLY CHAIN MANAGEMENT STRATEGIC MANAGEMENT
MARTIN MURRAY
Supply chain management operates at three levels: strategic, tactical, and operational. At
the strategic level, company management makes high-level strategic supply chain
decisions that are relevant to whole organizations.
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The decisions that are made with regards to the supply chain should reflect the overall
corporate strategy that the organization is following.
The strategic supply chain processes that management has to decide upon will cover the
breadth of the supply chain. These include product development, customers,
manufacturing, vendors, and logistics.
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marketing and advertising will be targeted.
Manufacturing
At the strategic level, manufacturing decisions define the manufacturing infrastructure
and technology that is required. Based on high-level forecasting and sales estimates,
company management has to make strategic decisions on how products will be
manufactured.
The decisions can require new manufacturing facilities to be built or to increase production
at existing facilities. However, if the overall company objectives include moving the
manufacturing overseas, then the decisions may lean towards using subcontracting and
third-party logistics.
As environmental issues influence corporate policy to a greater extent, this may influence
strategic supply chain decisions with regards to manufacturing.
Suppliers
The company management has to decide on the strategic supply chain policies with
regards to suppliers. Reducing the purchasing spend for a company can directly relate to
an increase in profit and strategically there are a number of decisions that can be made to
obtain that result.
Leveraging the total company’s purchases over many businesses can allow company
management to select strategic global suppliers who o�er the greatest discounts. But
these decisions have to correspond with the overall company objectives.
If a company has adopted policies on quality, then strategic decisions on suppliers will have
to fall within the overall company objective.
Logistics
As well as strategic decisions on manufacturing locations, the logistics function is key to
the success of the supply chain. Order fulfillment is an important part of the supply chain
and company management needs to make strategic decisions on the logistics network.
The design and operation of the network have a significant influence on the performance of
the supply chain.
Strategic decisions are required in warehouses, distribution centers, and determining
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which transportation modes should be used. If the overall company objectives identify the
use of more third-party subcontracting, the company may strategically decide to use
third-party logistics companies in the supply chain.
Strategic decisions determine the overall direction of the company’s supply chain. They
should be made in conjunction with the companies overall objectives and not biased
towards any particular product or regional location.
These high-level decisions can be refined, as required, to the specific needs of the
company at the lower levels which allow for tactical and operational supply chain decisions
to be made.
Summary
The primary and overriding goal of any supply chain is to make sure a company is delivering
the orders its customers want when its customers want those orders—and accomplish this
by spending as little money as possible. Only by lowering costs and improving performance
can a supply chain be truly optimized.
When a supply chain is managed at the operational, tactical and strategic levels—it has the
best chance of helping its company reach its goals.
When the strategic supply chain is optimized, a company is delivering what its customers
want, when its customers want it—and spending as little money as possible getting that
done. Starbucks' method of supply chain management is a great example of this.
SUPPLY CHAIN SPECIFICS
What Do Companies Need Tactical
What Do Companies Need Tactical Supply Chain Management?
GLOSSARY
What Is a Retailer?
OPERATIONS
A Look at How Operational Supply Chain Management Works
LARGEST U.S. RETAILERS
Best Practice and Statistics for Supply Chain and Logistics Pros, Plus Fun
Facts
SUPPLY CHAIN BASICS
How to Create a Logistics Strategy for Your Supply Chain Management
SMALL BUSINESS
What You Should Know About Profitability Ratio Analysis
SUPPLY CHAIN BASICS
Tips for Optimizing Supply Chain Management
STRATEGIC MANAGEMENT
How Amazon Is Changing Supply Chain Management
STRATEGY & PLANNING
What Is a Marketing Plan?
STRATEGIC MANAGEMENT
Where Are Your Supply Chain's Hidden Costs?
SUPPLY CHAIN BASICS
How to Pick the Best Supply Chain for Your Product
SUPPLY CHAIN BASICS
How to Hire a Supply Chain Manager
SUPPLY CHAIN BASICS
How Supply Chain Can Impact Your Business
SUPPLY CHAIN SOFTWARE
Using POOL4TOOL Supply Collaboration Platform
SUPPLY CHAIN BASICS
No Pain, No Chain – How to Optimize Your Supply Chain
STRATEGIC MANAGEMENT
Strategic Supply Chain Forecasting for Manufacturers
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Product Development
Senior management has to define a strategic
direction when considering the products that
the company should manufacture and o�er to
their customers.
As product cycles mature or product sales
decline, management has to make strategic
decisions to develop and introduce new
versions of existing products into the
marketplace, rationalize the current product
o�ering, or developing a new range of products
and services.
These strategic decisions may include the need to acquire another company or sell existing
businesses. When making these strategic product development decisions, the overall
objectives of the firm should be the determining factor.
Customers
At the strategic level, a company has to identify the customers for its products and
services. When company management makes strategic decisions on the products to
manufacture, they need to then identify the key customer segments where company
marketing and advertising will be targeted
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